Marketing research enables a merchant to collect information about a product, the market, the competition and the perceptions of users.
The marketing mix is an organization's overall offer or value to the customer. The basic marketing mix is often nicknamed “the 4Ps” (product, place/distribution, pricing, promotion); these being the elements in the marketers armory—aspects that can be manipulated to keep ahead of the competition. Thus a marketing research study refers to understanding and evaluating the impact of changing the existing marketing mix, i.e. the merchant's current offer to the customer, for a particular business objective. For example, the business objective may be to test a coupon promotion. The marketing research study will comprise of offering different values of coupons to a small subset of the users, in the target user segment. The user response is measured in terms of the purchase of item being discounted for different discount values.
Some Examples of business objectives to conduct a Marketing Research are:
1. Advertisement Decisions
The merchant wants to decide on the effectiveness of some advertisements either across the user population or within a particular segment of the population. Users are selected from the specified segment(s) and are shown the advertisements a fixed number of times. The response is used to determine the effectiveness of each advertisement.
Advertisement collateral decisions: Merchant may use image-based recommendations of the different products. Each image highlights a particular attribute or feature of the product and the response to each of the images may be used to target the advertisements to a larger population.
2. Pricing Studies
The merchant is contemplating a change in price for brand X priced currently at $50. Different prices may be offered by offering coupons, discounts, free goods to customers. Let the merchant decide coupons as a mechanism of offering lower prices. Coupons of value $2, $5, $10 are offered to different users and the response of each promotion is compared to determine the price sensitivity of each segment. Users who did not respond to coupons of $2 and $5 are again offered coupons of higher value, $10. The merchant estimates the expected sales at different price points to arrive at the new price for the product. A number of coupon values are offered to different users (same as pre-testing a coupon promotion) in the same user segment and the response of each promotion is compared to determine the price sensitivity of each segment and finally, arrive at a optimum discount to be offered to the users.
3. Competitive Product Studies:
The merchant wants to measure relative cannibalization of brands B and C when a discount is offered on brand A. Brand switching studies can be conducted by offering incentives on brand A to a small set of users of brands B and C. The choice made by the users and relative profitability of brand B and brand C enables the merchant to decide the discount.
Product switching studies can be conducted by offering incentives to users who prefer a particular brand. Based on the last product purchased by the users, users may be selected and offered coupons on the competing product with similar features. Decision of the user to use the coupon to switch from his preferred product to the competing product, provides merchant about the extent of loyalty in each segment and the impact of discounts.
Online marketing-research studies can be conducted by changing the marketing mix variables and studying the impact of the change on a response variable on a user-base that is present online. Various mechanisms may be used for conducting the online marketing research experiments such as online surveys and group discussions for explicit or implicit feedback on marketing-mix changes.
To ensure that the results of the online marketing research are not influenced by factors other than the marketing mix variables being studied, it is important that the study is conducted in a controlled manner. A controlled experiment refers to the scenario where there are two sets of users, an experimental set on which the experiment is conducted and a controlled set that is subjected to exactly the same conditions as the experimental set except that they do not take part in the experiment. The idea is to compare the effect of a single variable while all other variables are fixed. In the domain of marketing mix variation experiments, it requires offering the new set of marketing mix values to a user and comparing the response with another user who has the same profile as the first user, but is not subjected to the new set of marketing mix values. For example, in the coupon promotion study mentioned above, if a user has already purchased the item being discounted, her response will be different from a user who has not purchased the item in the past. So it is important to match the response of the users who are offered the coupon against those who are not offered the coupon, such that both set of users had either purchased the item in past or not purchased it in past. Similarly, the merchant may offer two different surveys to the controlled group and the experimental group, to study and remove the bias introduced by the survey methodology. The surveys might differ in sequence of questions, sequence of response options in questions and/or the text description/images displayed for the questions.
Any marketing research experiment also has an associated budget, one or more target user segments and a time period for completion. The merchant desires to complete the experiment within the specified budget, within the defined time period and obtain the required information from one or more set of target users/customers. For example, in the coupon promotion study mentioned above, the budget could be in terms of the total discount offered to the users or the merchant may want to finish the study before the start of the Christmas season or may wish to conduct the study only on loyal customers.
The present systems for online as well as offline marketing research do not provide effective or efficient sampling of users. For instance, users having different profiles are subjected to the experiment, without first determining whether it would result in a substantial gain in the data collection. The distribution of users into different experimental and control groups is not based on their profiles and therefore the grouping is ineffective. The selection of the experiment to be administered to a user group should preferably be based on the group profile. Since existing groups consist of heterogeneous profiles such effective implementation is not feasible. Such ineffective grouping of users also prevents the comparative study of results obtained from different groups of users.
The present systems are incapable of performing meaningful sampling in situations where a predefined user base is not available. For instance, first time users randomly arriving at a website in an online marketing scenario would not be processed or grouped in any meaningful manner.
Existing systems allocate the budget in a static manner and do not take into account situations where a deterministic estimate of the budget consumed at a given point in time is not available. For instance, if coupons are issued as an incentive for participation or as a part of the market research study, the redemption rate of coupons is not known deterministically. If the system assumes that all the coupons issued would be redeemed, the system would overestimate the budget consumed. The expenditure of budget depends on the experiment being administered. Present systems do not dynamically adjust budget allocation amongst different groups and users.
U.S. Pat. No. 6,112,186 discloses a method for calculating the similarity between users and taking intelligent decisions thereof. The invention uses collaborative filtering for calculating user similarity. But the similarity thus obtained is not used to maintain control group for comparing the result of the experiment.
US Patent Application Publication No. 2002/0042738 A1 discloses an invention that uses pricing and cost function on a case to case basis. A cost based analysis approach is used to determine whether or not the experiment should be administered. However the invention does not talk about smart expenditure of the budget specified.
US Patent Application Publication No. 2002/0035568 A1 defines user profiling and campaign editing. The invention does not talk about using the user profiles for keeping a control group for the experiment and profile based administration of the experiment.